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Uitcrarg 5arietírø.







IMPORTANT OPINION OF THE SOLICITOR. GENERAL AND MR. PITT TAYLOR UPON RAILWAY LIABILITIES. [From the Sunday Timei.] For the satisfaction of our readers, we, however, determined on having the best legal opinion that could be obtained on the subject, and with this view submitted the following case to the solicitor-general and Mr. Pitt Taylor:- CASE. The opinion of counsel is requested on the following case:- Among the numerous railway projects we have selected three, which we shall call A, B, and C. Railways. The provisional committees, in advertising these lines, set forth the advantages to be derived, and then give the following form of request to be made bv applicants for rail way shares:- THE 'A' RAILWAY FOlnf OF APPLICATION FOR SHAKES. To the Provisional Committee of the 'A' Railway. Gentlemen, — I request you will allot me shares of £?O each in this company, and I agree to accept the same, or any smaller number which may be allotted to me, to pay the de- posit thereon, and execute the parliamentary contract and subscribers' agreement when required. Dated this day of J!J45. Na-me in full Occupation or profession Residence Reference The same form of request is also given in the B' and C railways. A gentleman named Z filled up and signed, and sent to each of the committees of three railways a request for 50 shares. Shortly afterwards he received from the secretary of railway 'A' the following letter "'A' RAILWAY COMPANY. DEPOSIT, .652103. 1st October, 1845. "Sir,—I am directed by the committee of management of the 'A' Railway Company to inform you that 25 shares in this company have been allotted to you, and that the deposit of £ 2 2s. per share, amounting to the above sum, must be paid to one of the undermentioned bankers on or before Wednesday, the 25th instant, or such allotment will be void. This letter, with the bankers' receipt at foot, must bo ex- changed for scrip certificates upon the execution of tho sub- scribers' agreement and parliamentary contract, which will lie for signature, &e. I am, Sir, &c., N. M Secretary." Then follows the names of several bankers appointed to receive deposits. From the B' Railway Mr, Z. received a similar letter signed by the secretary of the company, with the variation that instead of the words ''or such allotment will be void the words in default of which this allotment will be cancel- led, and the shares disposed of to other applicants'' are used. And from the • C' Railway Mr. Z. received a lettei from the secretatty of the company as follows The managing committee of the • 0' Railway have, at your request, allo(Md r'11 26 iharu of 430 each, on voadiHoa that yon pay a deposit of f2 2s. per share, on or before Saturday, tlr 7th instani, to one of the undermentioned bankers," &c. It will be seen that the last letter of allotment says nothing ab uit the allotment being void" or cancElied," if the deposits are not paid, but makes a complete contract, on con- dition of the deposit being paid by a given day. Before Mr. Z. paid the deposits, or signed the subscription contracts or parliamentary deeds, a panic arose in the railway share market, and all or most of the new schemes having gone to a discount, he has declined to take up the shares and to pay the deposits thereon, and he has received letters from the s )- liciti rs of the company threatening proceedings to compel him to comply with the letters of request, and he now wishes the advice of counsel h JW far he is liable in respect of such letteis. Firstly—Have the provisional committees any and what remedy against Air. Z. to compel him to take up the shares allotted to him, and to pay his deposits thereon, and to sign the subscribers' and parliamentary contracts? If you should be of opinion that the provisional committees have such re- medy, must they sue in law or in equity? Seeing that if the letters of request and the answers should be held to be bind- ing contracts, do they not constitute a partnership between himself and the provisional committees and shareholders at lar^e ? Secondly—Referring to the terms of the letters received from the 'A' and n' railway committees, declaring that upon non-payment of the deposit "the allotment will be void" in the 'A' Railway, and "canceDed.and the shares disposed of" in the B' Hail way and to the condition cf payment in the 'C' Itailway-is it competent to Mr. Z. to elect not to comply with the terms of the letters of allotment, and thus to make void or cancel his contract; or is such election in the com- mit ees alone? Thirdly-Assuming that there is a sufficient contract in these several rail ways to bind Mr. ZI and that he cannot make void or cancel his engagements by non-compliance with the letters of allotmen', w.ll it be a good ground of defence to any proceedings that may be taken against him if the names of responsible and influential parties have been put upon the provisional committees without their knowledge or consent; or that exaggerated and untrue statements of the profits and advantages 'o arise to the shareholders have been published by the committees to induce parties to subscribe for shares? And generally-Be pleased to suggest to Mr. Z. any steps ho may safely take to save himself from the consequences of his having made application for shares, it being more than probable that neither of the said lines will be able to carry their said hills through Parliament. THE SOLICITOR-GENERAL'S OPIVIOV. With respect to the first question submitted for our opinion we are unable to say how far the prospectus which had been issued by each company may qualify or affect the contract entered into between Z and the provisional committee of each company; but if such prospectus be legal and conformable to and authorise the contract, Z. is bound by his agreement. It is a contract to become a partner to the extent of 25 shares in a co-psrtn: rship recognised by law.—See 7 and 8 Vict c, 110, Joint Stock Company Act. Many and great practical and technics) difficulties, however, would surround and impede any attempt to enforce the con- tract, either at law or in equity. At law every contracting party must be a co-plaintiff, and who are the contracting par- it, s, or promises, must in each case depend upati the prospec- tus and advertisements, and other nutters preceding and attending the contract. In equity, too, the plaintiffs must name iu their biil for specific performance all the persons with whom the defendant has contracted to enter into partnership, and mllst fllrther allege and prove that all such persons are ready and willing to become his co-partners. Many other difficulties must also arrive, which- ever course be adopted, and we cannot see how either could be ultimately successful. SECOND QOKSTION.—The election as to forfeiture or can- cellation, would be in tne company, and not in Z., who wonld not be ailowed to take advantage of his own breach of the agreement. TMtRD QtJESTtON.—It would be a good defence to any action that the names of responsible and influential persons had been published as directors or shareholders, when, in fact they were unconnected with the project, if it could be shown that Z. knew of such publication, and was induced thereby to apply for shares. Whether exaggerated or un:rue statements would vitiate the contract depends upon the nature of such statements. If they were untrue to the knowledge of those who made them, and were material, and calculated to mis- lead, and if, moreover, the purchaser had, either wholly or in part, been induced by them to enter into the contract, they would amount to a fraud, whereby such contract would be vitiated. FOURTH QUESTION.—-We advise Z. to remain quiescent, and if anv legal proceedings be instituted against him to de- fend himself. FIfZttOY KELLY. J. PITT TAYLO i. Temple, Dec. G, 1845*



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